26 Cfr 301.9100-8

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§ 301.9100–8

26 CFR Ch. I (4–1–13 Edition)

an application for an exemption under
section 1402(e)(1).
(6) Effective date of this provision. This
provision shall apply with respect to
remuneration received in the taxable
years for which the individual designates the revocation to be effective,
as described in paragraph (h)(3) of this
section, and with respect to monthly
insurance benefits payable under title
II of the Social Security Act on the
basis of the wages and self-employment
income of any individual for months in
or after the calendar year in which
such individual’s application for revocation is effective (and lump-sum
death payments payable under such
title on the basis of such wages and
self-employment income in the case of
deaths occurring in or after such calendar year).
(i) Revocation of the election for exemption from social security taxes by certain
churches on qualified church-controlled
organizations—(1) In general. This paragraph applies to the election under Act
section 1882 (Code section 3121 (w)(2)) to
revoke an election under section
3121(w) by a church or qualified churchcontrolled organization (as defined in
section 3121(w)(3)).
(2) Time and manner of revoking the
election. The revocation described in
this paragraph (i) shall be made by filing a Form 941 on or before the due
date for filing Form 941 (without regard to extensions) for the first quarter
for which the revocation is to be effective, accompanied by payment in full
of the taxes that would be due for that
quarter had there been no election
under section 3121(w). See paragraph
(i)(4) of this section for the effective
date of revocations made under this
paragraph (i).
(3) Revocability of the revocation of the
election. Once an election under section
3121(w) is revoked under this paragraph
(i), a new election under section 3121(w)
may not be made.
(4) Effective date of this paragraph. A
revocation made under this paragraph
(i) shall be effective for the quarter of
the calendar year covered by the Form
941 on which the revocation is made in
accordance with paragraph (i)(2) of this
section and all subsequent quarters.
However, no revocation shall be effective prior to January 1, 1987 unless

such electing church or church-controlled organization had withheld and
paid over all employment taxes due, as
if such election had never been in effect, during the period from the effective date of the election being revoked
through December 31, 1986.
(j) Additional information required.
Later regulations or revenue procedures issued under provisions of the
Code or Act covered by this section
may require the furnishing of information in addition to that which was furnished with the statement of election
described in this section. In such event,
the later regulations or revenue procedures will provide guidance with respect to the furnishing of such additional information.
[T.D. 8124, 52 FR 3624, Feb. 5, 1987; 52 FR 8405,
Mar. 17, 1987; 52 FR 10085, Mar. 30, 1987, as
amended by T.D. 8180, 53 FR 6147, Mar. 1,
1988; T.D. 8267, 54 FR 38980, Sept. 22, 1989. Redesignated and amended by T.D. 8435, 57 FR
43895, 43896, Sept. 23, 1992; T.D. 8513, 58 FR
68764, 68765, Dec. 29, 1993; T.D. 8530, 59 FR
12844, Mar. 18, 1994; T.D. 8644, 60 FR 66926,
Dec. 27, 1995]

§ 301.9100–8 Time and manner of making certain elections under the
Technical and Miscellaneous Revenue Act of 1988.
(a) Miscellaneous elections—(1) Elections to which this paragraph applies.
This paragraph applies to the elections
set forth below provided under the
Technical and Miscellaneous Revenue
Act of 1988, 102 Stat. 3342 (the Act).
General rules regarding the time for
making the elections are provided in
paragraph (a)(2) of this section. General rules regarding the manner for
making the elections are provided in
paragraph (a)(3) of this section. Special
rules regarding the time and manner
for making certain elections are contained in paragraphs (a) through (i) of
this section. In this paragraph (a)(1), a
cross-reference to a special rule applicable to an election is shown in brackets at the end of the description of the
‘‘Availability of Election.’’ Paragraph
(j) of this section lists certain elections
provided under the Act that are not addressed in this section. Paragraph (k)
of this section provides that additional
information with respect to elections
may be required by future regulations
or revenue procedures.

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Internal Revenue Service, Treasury

§ 301.9100–8

Section of act

Section of code

Description of election

Availability of election

1002 (a)(11)(A)

168(b)(2) ...........

Election to depreciate property using the
150 percent declining balance method for
one or more classes of property for any
taxable year.

1002(a)(23)(B)

168(d)(3)(B) ......

Election to disregard property placed in
service and disposed of in the same taxable year in applying the 40 percent test
to determine if the mid-quarter convention
applies.

1002(l)(1)(A) ...

42(b)(2)(A)(ii) ....

Election to use the applicable percentage for
a month other than the month in which a
building is placed in service.

1002(l)(2)(B) ...

42(f)(1) ..............

1002(l)(4) ........

42(d)(3)(B) ........

1002(l)(12) ......

42(g)(3)(B)(i) .....

1002(l)(19)(B)

42(i)(2)(B) .........

1005(c)(11) .....

469,163 .............

Election to defer the beginning of the credit
period for the low-income housing credit.
Election to exclude excess costs of disproportionate units.
Election to aggregate buildings in a low-income housing project to satisfy the minimum set-aside requirement elected under
section 42(g)(1) of the Code.
Election to reduce eligible basis by outstanding balance of Federal loan subsidy
or proceeds of tax-exempt obligation.
Election to treat certain carryovers of disallowed investment interest expense as
passive activity deductions for the first
taxable year beginning after December
31, 1986.

For property placed in service after December 31, 1986, the election must be made
for the taxable year in which the property
is placed in service. For taxable years
ending before January 1, 1989, taxpayers
have until January 22, 1990, to amend
their returns to elect the 150 percent declining balance method, regardless of
whether the taxpayer had used or elected
to use a different method for property
placed in service during those taxable
years. The election will apply to all property in the class placed in service during
the taxable year for which the election is
made.
Available for property placed in service in
taxable years beginning on or before
March 31, 1988. Election will apply to all
property placed in service and disposed of
during the taxable year for which the election is made.
Available for qualified buildings placed in
service after December 31, 1987, and
with respect to which either a binding
agreement is made as to the allocable
credit dollar amount or tax-exempt bonds
are issued. [See paragraph (b) of this section.]
Available for qualified buildings placed in
service after December 31, 1986.
Available for qualified buildings placed in
service after December 31, 1986.
Available for qualified buildings placed in
service after December 31, 1986.

1006(d)(15) .....

382 ....................

As a general rule, a firm commitment underwriter of an offering of a loss corporation’s
stock made before September 19, 1986
(January 1, 1989, for an institution described in section 591) is not treated as
acquiring underwritten stock if it is disposed of pursuant to the offering on or
before 60 days after the initial offering.
The loss corporation may elect not to
apply the general rule.

1006(j)(1)(C) ...

171(e) ...............

Election to reduce interest payments received on certain bonds by allocable bond
premium in accordance with section
171(e) of the Code.

Available for qualified buildings placed in
service after December 31, 1986.
Available for investment interest that is disallowed for the last taxable year beginning
before January 1, 1987, and is properly
allocable to a passive activity for the first
taxable year beginning after December
31, 1986. [See paragraph (c) of this section.]
Available to any loss corporation to which
the general rule would otherwise apply.
The election is to be made by filing a
statement with the District Director with
whom the loss corporation would file its
Federal income tax return. The statement
must identify the election as an election
under section 1006(d)(15) of the Act and
must (1) contain the taxpayer’s name, address, and employee identification number, (2) identify the transaction to which
the election relates, (3) represent that the
conditions for making the election have
been satisfied, and (4) be signed by a
person authorized to sign the Federal income tax return of the loss corporation.
Available for obligations acquired after October 22, 1986, and before January 1, 1988.

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Section of act

26 CFR Ch. I (4–1–13 Edition)

Section of code

Description of election

Availability of election

1006(t)(18)(B)

860F(e) .............

Election not treat a REMIC (real estate
mortgage investment conduit) as a partnership for purposes of determining who
may sign the REMIC return.

1008(c)(4)(A) ..

460(b)(3) ...........

Election not to discount an amount received
or accrued after completion of a contract
to its value as of the completion of the
contract for purposes of applying the lookback method.

1009(d) ...........

165(1) ...............

1010(f)(1) ........

831(b)(2)(A) ......

1010(f)(2) ........

835(a) ...............

1011(a) ...........

219(g)(4) ...........

Election to treat amount of reasonably estimated loss on a deposit in an insolvent or
bankrupt qualified financial institution as a
loss described in either section 165(c) (2)
or (3) of the Code and incurred in the taxable year for which the election is made.
Election for insurance companies other than
life to use alternative tax under certain circumstances.
Election for an interinsurer or reciprocal
underwirter mutual insurance company
subject to section 831(a) of the Code to
be subject to section 835(b) limitation.
Election to treat a married individual as not
married for purposes of certain contributions made to an individual retirement
plan for 1987.

Available for REMICs with a start-up date
(as defined in section 860G(a)(9) of the
Code, as in effect on November 9, 1988)
before November 10, 1988. The election
is made by attaching a statement to the
amended tax return for tax year 1987 or
to the tax return for the first taxable year
for which the election is to be effective.
Effective as if included in the Tax Reform
Act of 1986 (1986 Act) (available for contracts entered into after February 28,
1986). The election must be made on a
contract-by-contract basis by attaching a
statement to the tax return for the first
year after completion in which the taxpayer includes in income any adjustments
to the contract price or deducts any adjustments to contract costs (or, if later, the
first tax return filed after October 23,
1989).
Available for taxable years beginning after
December 31, 1981. [See paragraph (d)
of this section.]

1012(d)(4) .......

865(f) ................

Election to treat an affiliate and its whollyowned subsidiaries as one corporation.

1012(d)(6) .......

865(g)(3) ...........

Election to treat a corporation and its whollyowned subsidiaries as one corporation.

1012(d)(8) .......

865(h)(2) ...........

1012(1)(2) .......

245(a)(10) .........

1012(n)(3) .......

936 ....................

Election to apply treaty source rule to treat
gain from a sale of an intangible or of
stock in a foreign corporation as foreign
source.
Election to apply treaty source rules to treat
dividends received from a qualified 10percent owned foreign corporation as foreign source.
Election to reduce the amount of qualified
possession source investment income for
certain corporations that fail the 75 percent active trade or business income requirement of section 936(a)(2)(B) of the
Code due to section 1231(d) of the 1986
Act.

Available for taxable years beginning after
December 31, 1986.
Available for taxable years beginning after
December 31, 1986.

Available to a married individual who (1)
was an active participant during 1987, (2)
lived apart from the other spouse during
the entire 1987 calendar year, (3) filed a
separate income tax return for 1987, (4)
had adjusted gross income of not more
than $35,000 for 1987, and (5) made a
contribution to an individual retirement
plan for 1987.
Shareholder-level election, available, subject
to certain conditions, to United States
residents selling stock in an affiliate which
is a foreign corporation. Available for taxable years beginning after December 31,
1986.
Shareholder-level election, available only to
individual bona fide residents of Puerto
Rico, if the corporate group is engaged in
active trade or business in Puerto Rico
and meets a gross income test. Available
for taxable years beginning after December 31, 1986.
Taxpayer election for treatment of gain on
the disposition of certain stocks and intangibles. Available for taxable years beginning after December 31, 1986.
Available to corporations for distributions out
of earnings and profits for taxable years
beginning after December 31, 1986.
Corporate-level election, available for any
taxable year beginning in 1987 or 1988.

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§ 301.9100–8

Section of act

Section of code

Description of election

Availability of election

1012(bb)(4) .....

904(g)(10) .........

Available generally beginning July 18, 1984
(the amendment is to take effect as if included in the amendment made in section
121 of the Tax Reform Act of 1984).

1014(c)(1) .......

664(b) ...............

Election to apply treaty source rules (in lieu
of rules in section 904(g) of the Code) to
treat an amount derived from a U.S.owned foreign corporation as foreign
source.
Election by a beneficiary of a trust to which
section 664 of the Code applies to obtain
certain benefits of section 1403(c)(2) of
the 1986 Act, relating to the ratable inclusion of certain income over 4 taxable
years.

1014(c)(2) .......

652, 662 ...........

Election by any trust beneficiary (other than
a beneficiary of a trust to which section
664 of the Code applies), to waive the
benefits of section 1403(c)(2) of the 1986
Act.

1014(d)(3)(B),
1014(d)(4).

643(g)(2) ...........

Election to have certain payments of estimated tax made by a trust or estate treated as paid by the beneficiary.

2004(j)(1) ........

1503(e) .............

2004(m)(5) ......

384 ....................

Election, made by an affiliated group filing a
consolidated return upon the disposition of
intragroup stock on or before December
15, 1987, to reduce the disposing member’s basis in the indebtedness of the
subsidiary member whose stock has been
disposed of, in lieu of taking into account
as negative basis the ‘‘unrecaptured
amount’’ allocable to the stock disposed
of.
Election to have amendments (to the limitation on use of preacquisition losses to offset corporate built-in gains) made by section 2004(m) of the Act not apply in any
case where the acquisition date is before
March 31, 1988.

4004(a) ...........

42(j)(5)(B) .........

Election to have certain partnerships not
treated as the taxpayer to which the lowincome housing credit is allowable.

4008(b) ...........

41(h) .................

Election to have the research credit under
secction 41 of the Code not apply for any
taxable year.

Available for taxable years beginning after
December 31, 1986, provided the trust
was required to change its taxable year
under section 1403(a) of the 1986 Act.
Election is made by attaching a statement
to an amended return for the trust beneficiary’s first taxable year beginning after
December 31, 1986. Amended return
must be filed on or before January 22,
1990. If no such election is filed, the benefits of section 1403(c)(2) are waived.
Available for taxable years beginning after
December 31, 1986. Election is made by
attaching a statement to an amended return for the trust beneficiary’s first taxable
year beginning after December 31, 1986.
Amended return must be filed on or before January 22, 1990.
Available for taxable years beginning after
December 31, 1986. In the case of an estate, the election is available only for a
taxable year reasonably expected to be
the estate’s last taxable year. Election
must be made by the fiduciary of the trust
or estate on or before the 65th day after
the close of the taxable year for which the
election is made. The election must be
made by that date by filing Form 1041–T
with the Internal Revenue Service Center
where the trust’s return for such taxable
year is required to be filed. The trust’s return (or amended return) for that year
must include a copy of the Form 1041–T.
Available to an affiliated group filing a consolidated return in which a member disposes of intragroup stock on or before
December 15, 1987.

Available when the acquisition date is before
March 31, 1988. Election must be made
not later than the later of the due date (including extensions) for filing the return for
the taxable year of the acquiring corporation in which the acquisition date occurs
or March 10, 1989.
Available for qualified buildings placed in
service after December 31, 1986, and
owned by partnerships with 35 or more
partners. [See paragraph (b) of this section.]
Available in any taxable year beginning after
December 31, 1988. The election is made
by not claiming the research credit on an
original return, or by filing an amended return on which no research credit is
claimed, at any time before the expiration
of the 3-year period beginning on the last
day prescribed by law for filing the return
for the taxable year (determined without
regard to extensions). The election may
be revoked within the above-described 3year period by filing an amended return
on which the credit is claimed.

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Section of act

26 CFR Ch. I (4–1–13 Edition)

Section of code

Description of election

Availability of election

Election to recognize gain on exchange of
life insurance contracts to avoid the characterization of life insurance contract as a
modified endowment contract.
Election to use 120 percent of the Applicable Federal Midterm rate for either of the
two months preceding a valuation date in
valuing certain interests transferred to
charity for which an income, estate, or gift
tax charitable deduction is allowable.

Available for contracts entered into after
June 20, 1988, and before November 6,
1988, which are exchanged before February 10, 1989.
Available in cases where the valuation date
occurs on or after May 1, 1989. The election is made by attaching a statement to
the last income, estate, or gift tax return
filed before the due date, or if a timely return is not filed, the first return filed after
the due date. The statement shall contain
the following: (1) A statement that an
election under section 7520(a) is being
made; (2) the transferor’s name and taxpayer identification number as they appear on the return; (3) a description of the
interest being valued; (4) the recipients,
beneficiaries, or donees of the transferred
interest; (5) the date of the transfer; (6)
the Applicable Federal Midterm rate that
is used to value the transferred interest
and the month to which the rate pertains.
Available in the case of estates of decedents dying after November 11, 1988. The
election is made by the executor on the
last Federal estate tax return filed by the
executor before the due date of the return, or if a timely return is not filed by the
executor, on the first estate tax return filed
by the executor after the due date. However, elections made on or after May 5,
1991, may not be made on any return
filed more than one year after the time
prescribed for filing the return (including
extensions).
Available for taxable years beginning after
December 31, 1988. The election must be
made in the manner prescribed by the appropriate forms for the parent’s return for
the year for which the election is effective.
The election must be made by the due
date (taking extensions into account) of
such tax return.
Election may be made for a sale or exchange after September 30, 1988, by a
taxpayer who becomes physically or mentally incapable of self-care and meets the
required use rule provided in section
121(d)(9) of the Code. For the time and
manner of making the election see
§ 1.121–4 of the Income Tax Regulations.
Available for the first taxable year ending
after November 10, 1988. An eligible taxpayer will be treated as having made the
election if the taxpayer reports income
and expenses for the first taxable year
ending after November 10, 1988 in accordance with the exemption from section
263A of the Code.
Election for any taxable year beginning before January 1, 1989, may be revoked for
the first taxable year beginning after December 31, 1988.
Available without the consent of the Commissioner for the first taxable year beginning after December 31, 1986, during
which the taxpayer engages in the planting, cultivation, maintenance, or development of pistachio trees. Consent must be
obtained from the Commissioner for the
election to be made for any subsequent
taxable year.

5012(e)(4) .......

7002A(c)(3)
72(e).

5031(a) ...........

7520(a) .............

5033(a)(2) .......

2056(d) .............

Election to treat a trust for the benefit of a
surviving spouse who is not a U.S. citizen
as a Qualified Domestic Trust, transfers to
which are deductible under section
2056(a) of the Code.

6006(a) ...........

1(i)(7) ................

Election to include certain unearned income
of a child on the parent’s return.

6011 ................

121(d)(9) ...........

Election to exclude gain on the sale of a
principal residence by certain incapacitated taxpayers age 55 or over.

6026(a) ...........

263A(h) .............

Election for certain authors, photographers,
and artists to apply the exemption from
the uniform capitalization rules for the first
taxable year ending after November 10,
1988.

6026(b)(1) .......

263A(d)(1) ........

6026(c) ...........

263A(d)(3)(B) ....

Revocation of prior election under section
263A(d)(3) of the Code (relating to the
capitalization of certain expenses for the
production of animals).
Election by eligible taxpayers not to have
section 263A of the Code apply to costs
incurred in the planting, cultivation, maintenance, or development of pistachio
trees.

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Section of act

§ 301.9100–8

Section of code

Description of election

Availability of election

6152(a),
6152(c)(3).

2056(b)(7)(C)(ii)

6152(b),
6152(c)(3).

2523(f)(6)(B) .....

6152(c)(2) .......

2056(b)(7)(C)(ii),
2523(f)(6)(B).

Election to treat a survivor annuity payable
to a surviving spouse that is otherwise deductible under section 2056(b)(7)(C) of
the Code as a nondeductible terminable
interest.
Election to treat a joint and survivor annuity
in which the donee spouse has a survivorship interest that is otherwise deductible
under section 2523(f)(6)(A) of the Code
as a nondeductible terminable interest.
Election to treat as deductible for estate or
gift
tax
purposes
under
sections
2056(b)(7)(C) or 2523(f)(6) of the Code,
respectively, a survivor’s annuity payable
to a surviving spouse reported on an estate or gift tax return filed prior to November 11, 1988, as a nondeductible terminable interest.

6180(b)(1) .......

142(i)(2) ............

Available in the case of estates of decedents dying after December 31, 1981, and
in no event will the time for making the
election expire before November 11,
1990. [See paragraph (e) of this section.]
Available in the case of transfers made after
December 31, 1981, and in no event will
the time for making the election expire before November 11, 1990. [See paragraph
(f) of this section.]
Available to estates of decedents dying after
December 31, 1981, or to transfers made
after December 31, 1981, where: (1) the
estate or gift tax return was filed prior to
November 11, 1988; (2) the annuity was
not deducted on the return as qualified
terminable interest property under sections 2056(b)(7) or 2523(f) of the Code;
and (3) the executor or donor elects to
treat the interest as a deductible terminable
interest
under
sections
2056(b)(7)(C) or 2523(f)(6) prior to November 11, 1990. [See paragraph (g) of
this section.]
Available for bonds issued after November
10, 1988. [See paragraph (h) of this section.]

6181(c)(2) .......

148(f)(4)(A) .......

6277 ................

382, 383 ...........

Election by a loss corporation that otherwise
qualifies for the exception of section
621(f)(5) of the 1986 Act not to apply that
exception. That exception provides for the
inapplicability, in certain situations, of the
amendments to sections 382 and 383 of
the Code made by the 1986 Act (relating
to limitation of corporate attributes after an
ownership change). That exception applies with respect to a loss corporation’s
ownership change resulting from a reorganization described in section 368(a)(1)(G)
of the Code or from an exchange of debt
for stock in a title 11 or similar case if a
petition was filed with the court before August 14, 1986.

8007(a)(1) .......

3127 ..................

Election to be exempted from the taxes imposed by sections 3101 and 3111 of the
Code.

Election by a nongovernmental owner of a
highspeed intercity rail facility not to claim
any deduction under section 167 or 168 of
the Code and any credit under subtitle A,
in order for the facility to be described in
section 142(a)(11).
One-time election by the issuer of tax-exempt bonds outstanding as of November
11, 1988, other than private activity
bonds, to apply the amendments made by
section 148(b) of the Code to amounts
deposited after such date in bona fide
debt service funds.

(2) Time for making elections—(i) In
general. Except as otherwise provided
in this section, the elections described

Available for bonds outstanding as of November 11, 1988. The election must be
made in writing on the later of March 21,
1990, or the first date any payment is required under section 148(f) of the Code.
The election should be retained as part of
the issuer’s books and records (as defined in § 1.103–10(b)(2)(vi) of the regulations) of the bond issue to which it relates.
Available for ownership changes described
in section 621(f)(5) of the 1986 Act, if a
petition was filed with the court before August 14, 1986. The election is to be made
by filing a statement with the District Director with whom the loss corporation
would file its Federal income tax return.
The statement must identify the election
as an election under section 6277 of the
Act and must (1) contain the taxpayer’s
name, address, and employee identification number, (2) identify the transaction to
which the election relates, (3) represent
that the conditions for making the election
have been satisfied, and (4) be signed by
a person authorized to sign the Federal
income tax return of the loss corporation.
An individual employer and an employee,
both of whom are members of a recognized religious sect or a division thereof
described in section 1402(g)(1) of the
Code and adherents of established tenets
or teachings of such sect or division, may,
if both qualify and make elections, obtain
exemptions from the taxes imposed by
sections 3101 and 3111. [See paragraph
(i) of this section.]

in paragraph (a)(1) of this section must
be made by the later of—

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(A) The due date (taking into account any extensions of time to file obtained by the taxpayer) of the tax return for the first taxable year for
which the election is effective, or
(B) January 22, 1990 (in which case
the election generally must be made by
amended return).
(ii) No extension of time for payment.
Payments of tax due must be made in
accordance with chapter 62 of the Code.
(3) Manner of making elections. Except
as otherwise provided in this section,
the elections described in paragraph
(a)(1) of this section must be made by
attaching a statement to the tax return for the first taxable year for
which the election is to be effective. If
such tax return is filed prior to the
making of the election, the statement
must be attached to an amended tax
return of the first taxable year for
which the election is to be effective.
Except as otherwise provided in the return or in the instructions accompanying the return for the taxable
year, the statement must—
(i) Contain the name, address and
taxpayer identification number of the
electing taxpayer;
(ii) Identify the election;
(iii) Indicate the section of the Code
(or, if the provision is not codified, the
section of the Act) under which the
election is made;
(iv) Specify, as applicable, the period
for which the election is being made
and the property or other items to
which the election is to apply; and
(v) Provide any information required
by the relevant statutory provisions
and any information requested in applicable forms and instructions, such
as the information necessary to show
that the taxpayer is entitled to make
the election.
Notwithstanding the foregoing, an
amended return need not be filed for an
election made prior to October 23, 1989,
if the taxpayer made the election in a
reasonable manner.
(4) Revocation—(i) Irrevocable elections.
The elections described in this section
that are made under the following sections of the Act are irrevocable:
1002(a)(11)(A) (Code section 168(b)(2)),
1002(a)(23)(B), 1002(l)(1)(A) (Code section
42(b)(2)(A)(ii)), 1002 (l)(2)(B) (Code section 42(f)(1)), 1005(c)(11), 1008(c)(4)(A)

(Code section 460(b)(3)), 1014(c)(1),
1014(c)(2), 1014(d)(3)(B) and 1014(d)(4)
(Code section 643(g)(2)), 2004(m)(5),
4004(a)
(Code
section
42(j)(5)(B)),
5033(a)(2)
(Code
section
2056A(d)),
6006(a) (Code section 1(i)(7)), 6026(a)
(Code section 263A(h)), 6026(b)(1) (Code
section 263A(d)(1)), 6152(a) and 6152(c)(3)
(Code section 2056(b)(7)(C)(ii)), 6152(b)
and
6152(c)(3)
(Code
section
2523(f)(6)(B)), 6152(c)(2) (Code sections
2056(b)(7)(C)(ii) and 2523(f)(6)(B)), and
6180(b)(1) (Code section 142(i)(2)).
(ii) Elections revocable with the consent
of the Commissioner. The elections described in this section that are made
under the following sections of the Act
are revocable only with the consent of
the
Commissioner:
1006(d)(15),
1006(j)(1)(C), 1006(t)(18)(B), 1009(d) (Code
section 165(l)), 1010(f)(1) (Code section
831(b)(2)(A)), 1010(f)(2) (Code section
835(a)), 1012(d)(4) (Code section 865(f)),
1012(d)(6)
(Code
section
865(g)(3)),
1012(d)(8)
(Code
section
865(h)(2)),
1012(l)(2) (Code section 245(a)(10)),
1012(n)(3), 1012(bb)(4) (Code section
904(g)(10)), 2004(j)(1), 5031(a) (Code section 7520(a)), 6026(c) (Code section
263A(d)(3)(B)), and 6277.
(iii) Freely revocable elections. The
election described in this section that
is made under section 6011 of the Act is
revocable without the consent of the
Commissioner. (See section 121(c) of
the Code and § 1.121–4 of the regulations.)
(b) Elections with respect to the low-income housing credit. The elections under
sections
42(d)(3)(B),
42(f)(1),
42(g)(3)(B)(i), 42(i)(2)(B), and 42(j)(5)(B)
of the Code generally must be made for
the taxable year in which the building
is placed in service, or the succeeding
taxable year if the section 42(f)(1) election is made to defer the start of the
credit period, and must be made in the
certification required to be filed pursuant to section 42(l) (1) and (2), as
amended by the Act. The election
under section 42(j)(5)(B) of the Code
must be made by the later of the due
date of the certification or January 22,
1990. The election under section
42(b)(2)(A)(ii) must be made in accordance with the requirements of Notice
89–1, 1989–2 I.R.B. 10.
(c) Election to treat certain carryovers
of disallowed investment interest expense

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as passive activity deductions. The requirements of paragraphs (a) (2) and (3)
of this section do not apply to an election under section 1005(c)(11) of the
Act. Instead, the election must be
made at the time and in the manner
prescribed in Notice 89–36, 1989–13
I.R.B. 6. Thus, the election must be
made before the filing deadline specified in Notice 89–36 by amending previously filed returns to reflect any
change in the computation of tax liability that results from the election.
(d) Election with respect to the treatment of reasonably estimated losses in an
insolvent or bankrupt financial institution—(1) In general. This paragraph (d)
applies to an election under section
905(a) of the 1986 Act, and to an election under section 1009(d) of the Act,
both relating to section 165(l) of the
Code. If—
(i) As of the close of the taxable year,
it can reasonably be estimated that
there is a loss on a deposit (within the
meaning of section 165(l)(4)) of a qualified individual (as defined in section
165(l)(2)) in a qualified financial institution (as defined in section 165(l)(3)),
and
(ii) Such loss is on account of the
bankruptcy or insolvency of such institution, then the qualified individual
may elect under either section 165(l)(1)
or (5) (but not both), to treat the
amount (subject to the applicable limitations if under section 165(l)(5)) so estimated for that taxable year as a loss
described in either section 165(c)(3), relating to casualty losses, or section
165(c)(2), relating to transactions entered into for profit, and incurred during the taxable year.
The election will apply to all losses of
the qualified individual on deposits in
the institution with respect to which
an election is made. For additional information and examples of the application of the election rules, see Notice
89–28, 1989–12 I.R.B. 72.
This paragraph (d) includes the procedural and the principal substantive
rules first issued in Notice 89–28. For
specific rules relating to an election
under section 165(1)(5), see paragraph
(d)(2) of this section.
(2) Specific rules relating to the section
165(1)(5) election—(i) Applicability. An
election under section 165(1)(5) of the

Code may be made only if no part of
the taxpayer’s deposits in the financial
institution is federally insured. Generally, this requirement will be met
only in cases in which none of the deposits in the financial institution are
federally insured.
(ii) Dollar limitations. An election
under section 165(1)(5) of the Code is
limited to $20,000 ($10,000 in the case of
a separate return by a married individual) in aggregate losses on deposits
in any one financial institution. The
applicable dollar limit must be reduced
by the amount of any insurance proceeds that can reasonably be expected
to be received under any state law.
(3) Time and manner of determining loss
and making the election—(i) Year of election and determination of loss. A qualified individual may make an election
under section 165(1) of the Code either
for the first taxable year in which a
reasonable estimate of the loss can be
made or for a later taxable year that is
prior to the taxable year in which the
loss is sustained. The amount of the
loss is determined by the difference between a taxpayer’s basis in the deposits
and the amount that is reasonably estimated to be recovered, taking into account all facts and circumstances reasonably available to the taxpayer as of
the date the election is made. A reasonable estimate might be based, for
example, on the percentage of total deposits likely to be recovered by the depositors according to a determination
made by the regulatory authority or
trustee having responsibility over the
institution. In addition, the taxpayer’s
basis in the deposits must be reduced
to the extent that a loss is claimed.
(ii) Time and manner of making election. A qualified individual may make
an election under section 165(1) of the
Code on—
(A) The income tax return for the
taxable year with respect to which the
taxpayer made a reasonable estimate
of the loss;
(B) An amended income tax return
for a taxable year described in paragraph (d)(3)(ii)(A) of this section, if the
period prescribed for filing a claim for
refund or credit for that taxable year
has not yet expired; or, if applicable,

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(C) An amended income tax return
for a taxable year (beginning after December 31, 1981) described in paragraph
(d)(3)(ii)(A) of this section, whether or
not the claim for refund or credit is
barred by another provision of law, but
only if the amended return is properly
filed on or before November 9, 1989.
(iii) Information to include with election. The election should include any
information requested in the applicable
forms and instructions (e.g., Form 4684,
Casualties and Thefts). If the applicable form(s) and instructions do not
make reference to or request information concerning this election, the taxpayer should, on an appropriate line or
space clearly indicate the name of the
financial institution, include the following language: ‘‘Insolvent Financial
Institution Election,’’ and include the
calculation of the reasonably estimated loss claimed.
(4) Revocability of the election—(i) In
general. If a taxpayer desires to revoke
an election under section 165(l) of the
Code, the taxpayer must request, in
writing, the consent of the Secretary
setting forth the pertinent facts surrounding the election and the reasons
for requesting a revocation.
(ii) Exception. With respect to an
election made under section 165(l)(1) of
the Code prior to November 9, 1989, a
qualified individual may revoke such
election without securing the prior
consent of the Secretary but only if the
taxpayer makes an election under section 165(l)(5) by November 9, 1989, in
the manner prescribed in paragraph
(d)(3) of this section.
(5) Effective date. Paragraph (d) of
this section is generally effective for
elections made under section 165(1) of
the Code on or after November 10, 1988.
However, an election filed prior to February 24, 1989, that is made in any reasonable manner will be effective.
(e) Election to treat a survivor annuity
payable to a surviving spouse as a nondeductible terminable interest. Where the
time for making the election under
section 2056(b)(7)(C)(ii) of the Code to
treat the survivor annuity as nondeductible otherwise expires before November 11, 1990, the election may be
made before November 11, 1990, by filing with the Service Center where the
original return was filed supplemental

information under § 20.6081–1(c) of the
Estate Tax Regulations containing:
(1) A statement that the election
under section 2056(b)(7)(C)(ii) of the
Code is being made;
(2) The applicable revised schedules;
(3) A recomputation of the tax due;
and
(4) Payment of any additional tax
due.
(f) Election to treat a joint and survivor
annuity in which the donee spouse has a
survivor interest as a nondeductible terminable interest. Where the time for
making the election under section
2523(f)(6)(B) of the Code to treat the interest as nondeductible otherwise expires before November 11, 1990, the election may be made before November 11,
1990, by filing with the appropriate
Service Center an original return (or
an amended return if an original return
was filed) containing:
(1) A statement that the election
under section 2523(f)(6)(B) is being
made;
(2) A recomputation of the tax due;
and
(3) Payment of any additional tax
due.
(g) Election to treat survivor’s annuity
payable to the surviving spouse as qualified terminable interest property deductible under sections 2056(b)(7)(C) or
2523(f)(6) of the Code in the case of a return filed prior to November 11, 1988. (1)
In the case of an estate tax election
under section 2056(b)(7)(C) the election
is made by filing with the Service Center where the estate tax return was
filed supplemental information under
§ 20.6081–1(c) of the Estate Tax Regulations (and timely claim for refund
under section 6511 of the Code, if applicable) containing:
(i) A statement that the election
under section 6152(c)(2) of the Technical and Miscellaneous Revenue Act
of 1988 is being made;
(ii) The applicable revised schedules;
and
(iii) A recomputation of the estate’s
tax liability showing the amount of
any refund due.
(2) In the case of a gift tax election
under section 2523(f)(6) of the Code, the
election is made by filing with the
Service Center where the original return was filed an amended return (and

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timely claim for refund under section
6511, if applicable) containing:
(i) A statement that the election
under section 6152(c)(2) of the Technical and Miscellaneous Revenue Act
of 1988 is being made;
(ii) The applicable revised schedules;
and
(iii) A recomputation of the gift tax
liability showing the amount of any refund due.
(h) Elections with respect to certain
nongovernmentally owned rail facilities—
(1) In general. This paragraph applies to
the election under section 6180(b)(1) of
the Act (Code section 142(i)(2)) not to
claim a deduction under section 167 or
168 of the Code or any credit with respect to certain bond-financed property. An electing owner that is not a
governmental unit must make the
election at the time the loan agreement with the issuer of the bond is executed. The election must be signed by
the owner and include—
(i) A description of the property with
respect to which the election is being
made;
(ii) The name, address, and taxpayer
identification number of the issuing
authority;
(iii) The name, address, and taxpayer
identification number of the electing
owner; and
(iv) The date and face amount of the
issue used to provide the property.
(2) Other requirements. The electing
owner must provide a copy of the election to the issuing authority and to
any person purchasing the facilities
during the period the bonds are outstanding or within 6 years after the
last bond that is part of the issue is retired. The electing owner, purchaser,
and all successors in interest to the
electing owner or purchaser must each
retain the original election document
or a copy thereof in its records until 6
years after the later of the date the
last bond that is part of the issue is retired or the date such owner, purchaser
or successor in interest ceases to own
the facilities. The issuer must retain a
copy of the election until 6 years after
the date the last bond that is part of
the issue is retired. In addition, while
the facilities are nongovernmentally
owned, any publicly recorded document
with respect to the facilities must

state that neither the electing owner,
nor any person purchasing the facilities during the period the bonds are
outstanding or within 6 years after the
date the last bond that is part of the
issue is retired, nor any successor in
interest to the electing owner or such
purchaser, may claim any deduction
under section 167 or 168 of the Code or
any credit with respect to the facilities.
(3) Election is binding on purchasers
and successors. The election is binding
at all times on any person purchasing
the facilities during the period the
bonds are outstanding or within 6 years
after the date the last bond that is part
of the issue is retired and on all successors in interest to the electing owner
and such purchaser.
(i) Election under section 3127 of the
Code to be exempted from the taxes imposed by sections 3111 and 3101—(1) Application for exemption. To be exempt
from the taxes imposed under section
3111 and 3101 of the Code with regard to
wages paid after December 31, 1988, an
individual who is an employer and his
or her employee must each file an application on the prescribed form with
the Internal Revenue Service office
designated in the instructions relating
to the application for exemption.
(2) Approval of application for exemption. The application for exemption by
the individual employer or the employee will be approved only if:
(i) The application contains or is accompanied by the evidence described in
section 1402(g)(1)(A) of the Code and a
waiver
described
in
section
1402(g)(1)(B);
(ii) The Secretary of Health and
Human Services makes the findings described in section 1402(g)(1) (C), (D), and
(E) with respect to the religious sect or
division described in section 1402(g)(1)
of which the individual employer and
employee are members; and
(iii) No benefit or other payment referred to in section 1402(g)(1)(B) became
payable (or, but for sections 203 or
222(b) of the Social Security Act, would
have become payable) to the employee
filing the application at or before the
time of the filing.
(3) Effective period of exemption. The
election provided in paragraph (h)(1) of
this section will apply with respect to

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wages paid by such individual employer
during the period commencing with the
first day of the first calendar quarter,
after the quarter in which such application is filed, throughout which such
individual employer or employee meets
the applicable requirements specified
in paragraphs (h)(2) and (h)(3).
(4) Termination of election. The exemption granted under section 3127 of the
Code will end on the last day of the calendar quarter preceding the first calendar quarter thereafter in which:
(i) Such individual employer or the
employee involved ceases to meet the
applicable requirements of paragraphs
(h)(2) and (h)(3), or
(ii) The sect or division thereof of
which such individual employer or employee is a member is found by the Secretary of Health and Human Services
to have failed to meet the requirements of section 3127(b)(2).
(5) Both the individual employer and
employee must qualify and elect. The exemption from the taxes imposed under
sections 3101 and 3111 of the Code is applicable only if both the individual employer and the employee qualify and
make the election under the provisions
of section 3127.
(j) Certain elections not addressed in
this section. Elections under the Act
that are not addressed in this section
include:
(1) An election relating to the effective date of certain source rules under
section 861(a) of the Code (section
1012(g)(1) of the Act);
(2) An election relating to transitional rules for interest allocation
under 864(e) of the Code (section
1012(h)(7) of the Act);
(3) An election relating to the chain
deficit rules under section 952(c)(1)(C)
of the Code (section 1012(i)(25) of the
Act);
(4) An election relating to the definition of a passive foreign investment
company in section 1296 of the Code
(section 1012(p)(27) of the Act);
(5) An election by a shareholder of a
qualified electing fund under section
1291(d)(2)(B) of the Code (section
1012(p)(28) of the Act);
(6) An election to be treated as a
qualified electing fund under section
1295 of the Code (section 6127 of the
Act);

(7) An election relating to treatment
of an insurance branch as a separate
corporation under section 964(d) of the
Code (section 6129 of the Act);
(8) An election relating to certain
regulated futures contracts and nonequity
options
under
section
988(c)(1)(D) of the Code (section 6130(b)
of the Act);
(9) An election relating to certain
qualified
funds
under
section
988(c)(1)(E) of the Code (section 6130(b)
of the Act);
(10) An election under section
952(c)(1)(B) of the Code to apply section
953(a) without regard to the same country exception (section 6131(a) of the
Act);
(11) An election relating to treatment
of a foreign insurance company as a domestic corporation under section 953(d)
of the Code (section 6135 of the Act).
Guidance concerning the elections described in this paragraph (j) will generally be provided in regulations to be
issued under the relevant Code sections. With respect to certain elections
described in this paragraph (j), preliminary guidance has been published. See
Notice 88–125, 1988–52 I.R.B. 4, for guidance with respect to the election described in paragraph (j)(6) of this section, relating to the qualified electing
fund election. See Notice 88–124, 1988–51
I.R.B. 6, for guidance with respect to
the elections described in paragraph (j)
(8) and (9) of this section, relating to
section 988(c)(1) (D) and (E) of the Code.
(k) Additional information required.
Later regulations or revenue procedures issued under provisions of the
Code or Act covered by this section
may require the furnishing of information in addition to that which was furnished with the statement of election
described in this section. In that event,
the later regulations or revenue procedures will provide guidance with respect to the furnishing of additional information.
[T.D. 8267, 54 FR 38980, Sept. 22, 1989; 54 FR
41243, 41364, Oct. 6, 1989. Redesignated and
amended by T.D. 8435, 57 FR 43895, 43896,
Sept. 23, 1992; 57 FR 47373, Oct. 15, 1992]

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